Permits fell for a second straight month, with Ontario and Alberta leading the downturn
Canada’s construction sector saw another setback in August, as the total value of building permits slipped 1.2% to $11.6 billion, according to new data from Statistics Canada.
The decline, marking the sixth monthly drop so far in 2025, was driven largely by weaker residential construction intentions in Ontario and Alberta, even as British Columbia and Quebec posted gains.
The latest figures show a continued cooling in the country’s building pipeline.
Residential permits fell 2.4% to $7.0 billion in August, with single-family construction intentions dropping $112.3 million to $2.5 billion.
Ontario led the retreat, down $131.0 million, followed by Alberta’s $59.6 million decline. Quebec and Manitoba offered some relief, with modest increases of $36.8 million and $23.2 million, respectively.
Multi-family permits also softened, slipping $61.5 million to $4.5 billion. Again, Ontario and Alberta saw the sharpest pullbacks, but British Columbia bucked the trend, adding $329.7 million—most of it concentrated in the Vancouver metropolitan area.
Quebec also contributed a $118.7 million boost. Nationally, 20,500 multi-family and 4,100 single-family dwellings were authorized in August, a 0.9% decrease from July.
On a constant dollar basis, the total value of permits was down 1.5% from July and 5.9% year-over-year.
The Royal Bank of Canada has previously highlighted several reasons for Ontario’s slowdown in new home construction. Builders are dealing with fast-rising costs for land, labour, and materials, made worse by steep municipal development fees. Since 2018, Ontario’s residential construction price index has climbed faster than in any other province.
Meanwhile, more existing homes are on the market—often priced below new builds—which has reduced demand for new projects, especially condos. Investor interest in pre-construction condos, once strong in the GTA, has dropped sharply because of higher interest rates, weaker rental markets, and falling condo prices.
Even though cities like Toronto are approving more building permits, many projects are stalled due to these cost challenges.
Meanwhile, non-residential permits provided a modest offset, edging up 0.8% to $4.6 billion, according to the latest Statistics Canada report.
Institutional projects led the way, with Ontario’s hospital construction intentions in Toronto and government buildings in Vancouver driving gains. However, commercial and industrial permits both declined, with Ontario again seeing the steepest losses.
Building permits are a key early indicator of construction activity, but do not guarantee that projects will break ground. The August report, based on a survey of 2,400 municipalities covering 95% of Canada’s population, underscores ongoing uncertainty in the sector.
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